How to start a Bakery Business in India [Business Plan]
Updated: Aug 17
The bakery industry in India has really started taking off. With the pandemic and the increasing usage of social media, people are moving more towards bakery and sugary food items that they see online.
The bakery business in India as of 2020 had an annual turnover of $ 7.60 billion. The growth is mainly being driven by the biscuits, cookies and cakes industry. Especially biscuits and cookies which are ready to eat and affordable.
Bakeries are also a highly lucrative business segment in the restaurant industry. Restaurant businesses are going beyond the basic bakery items and offering a varied bunch of choices originated from around the world.
It is not just about breads and cakes and cookies but the food items in the bakery industry in India has gone inter-continental. Let us understand how to start a bakery business in India?
How to Start Bakery Business in India [Bakery Business Plan]
Types of bakery businesses
There are many different types of bakery business models that you can choose from.
Storefronts: Most commonly found bakery business plan in India is the storefront one. It is similar to the typical grocery store except that it specializes in bakery goods.
Home-based: This is a go-to option when you do not want to invest a large amount of money. This one needs little investment as you bake from your house and sell your products.
Online bakery: Today’s social media era is actually a pretty good time for having an online bakery business plan in India. You can leverage the power of the internet and social media to get orders and customers while working and selling your products from home. It requires very little finance and is also convenient.
Bakery cafes: This concept is an expensive one but this is also one of the emerging new restaurant themes in the market. It is similar to having a dessert cafe which involves having a commercial space with a wide range of menu and a promise to provide an experience to your customers.
Also, read - What is KOT in Restaurant? (Kitchen Order Ticket)
How to create a bakery business plan in India?
For creating a bakery business plan in India, you have to plan and strategize step by step the process that you will follow.
You must have an understanding and a thorough research conducted of your target audience.
You must have an analysis conducted on the current market scenario, current market trends and your competitors.
You must have an overview of the business model, mission and vision of your business, legal structure and ownership.
Conduct an industry analysis and a SWOT analysis to identify the strengths, weaknesses, and opportunities.
Build a plan of operations of how the business would function, menu, service, raw materials, staff management, etc.
Marketing and financial analysis are a must of any business plan.
Profit margin in the bakery business in India
Because of how emerging this industry is, there is a huge profit margin in the bakery business in India. When starting a bakery business in India, you have to keep in mind these financials that you will have to invest in:
If you are renting out a space for your business, you have to check the current market rates as well as make sure that the location you have chosen for your bakery is also affordable for you, rentwise.
Equipments and Machinery
Bakeries require a lot of machinery and equipment. From refrigerators, ovens, processors, grinders, display boxes, utensils, containers, deep freeze, milk pots, weighing scale, baking trays, working tables, gas cylinders and even mixing bowls.
Procuring a license can also be costly and in India, it can actually cost up to Rs. 30,000 to procure all permits and licenses.
Employees and Staff
When you are running a bakery business, you also require staff for operations and day to day activities. You need a chef, a support chef, a manager, a server, a housekeeper, and even a delivery person if that is a service you offer.
For spreading the word about your newfound business, you will also have to incur marketing costs. It can include costs for both offline marketing and also online marketing (more of online marketing as that is more relevant today.)
Also, read - What is a Cloud Kitchen? [Concept & Business Model]
How to choose a location wisely?
An ideal place for opening up a bakery would be a mall, a food court, a reputed market that has a high footfall. Ideally, ground floors provide more visibility and accessibility to the customers.
It has to be ensured that the place you choose also has a good supply of water and drainage. Another thing to be kept in mind is that the place be clean and hygienic. It is a must and also a very important requirement for any food related business.
Also, when getting the location, proper legal agreements and paperwork needs to be in order. You must also get a No Objection Certificate from the owner of the place you are renting.
Licenses required to start a bakery
The various licenses required for a bakery business, even if it is a small bakery business in India are:
FSSAI license: This is the food license required mandatorily to start the bakery business. It certifies that all food prepared is under the guidelines of Food Safety and Standard Authority of India.
Health license: With the help of a local municipal health inspector, you can obtain a health license. It is to ensure that you are following all the health related guidelines set up by the health department.
Fire license: Your business needs to have fire extinguishers throughout the store. You also need to get an NOC from the fire department and follow all the safety protocols.
GST registration: If your annual turnover is above Rs 20 lakhs, you need a GST registration. Goods and services tax applies to all baked goods as well and you can get a GST registration done by your CA.
Apart from this, you also require a business pan card and if you have your own custom logo, you need to get that also trademarked.
Also, read - What is Menu Engineering?
Equipment required for Bakery
Mixers, choppers, food processors
Utensils such as spatulas, dough rolling mats, rolling pins, grates
Decor for cakes
Ovens and microwaves
Pans and spoons
Airtight storage for perishable raw materials
Bags for take-home food orders
Display and packaging boxes
Design, display and POS
The display area needs to be designed in a manner where it is noticeable and customers walk in. You need a display fridge for cakes, pastries and items that require to be in the fridge.
There should also be a bakery POS software which is integrated with your inventory. Ensure that the POS you buy has features to also manage the shelf life of all of the baked items as well as manage the robust inventory that includes perishables.
Marketing, branding and collaborations
Marketing is a huge investment which is a must for every business even a small bakery business in India. You have to establish a brand identity by getting a logo made by a designer. It will help you create a unique identity and help your branding.
You must have a well designed menu, boarding's and hoarding advertisements, well updated social media pages and marketing campaigns run through those social media pages.
Another major way of obtaining new customers as well as gaining profits is by partnering with online food delivery services and businesses. When your customers can order food online, it would help by boosting your online presence and generate more business.
Bakery business in India is currently a huge opportunity for those in the food business and for those who want to start a new business. For starting a bakery business, all you need to do is find the ace location, build a plan and strategize, purchase the equipment and get the necessary license and you are all set.
Once the finances are managed, the staff is hired, the food menu is fixed, the branding is done, you are ready to start your own Bakery Business in India.